Revenue estimates take multi-billion-dollar hit from tax cuts
New revenue forecasts out today show Michigan’s recent slew of tax changes could cost the state billions over the next few years.
This year, the state raised its earned income tax credit, lowered retirement taxes, and earmarked some money for business incentives. That’s on top of an income tax cut triggered by a projected surplus outlined in the state’s January “Consensus Revenue Estimating Conference.”
State Budget Director Chris Harkins says there's still an expected surplus, just a smaller one. He says the state can adjust to the new forecast.
“This would be the same for any one of our revenue conferences if there were differences in revenues between January and May. So, right now, we’re just going to work with the Legislature and make sure we have a version of the budget for 2024 that meets these revenues.” said Harkins.
The state faces a June 30th statutory deadline to finalize its next budget.